Alchemy announced the latest version of its localization software. While it claimed the usual benefits of cost savings, higher quality, and a quick return on investment, we think that these anodyne claims hide some more substantive accomplishments that are surprising from such a small company.

How small? The company recently posted a record year in which it sold more than 2,000 copies of its visual localization software. Based on license prices, that means Alchemy booked about US$2.6 million for the year. That’s more than any of competitors such as PASS or Schaudin, but a sure sign that the company has been selling into the low-volume software localization market. Recent announcements show that Alchemy is targeting the broader market of content and translation, an area dominated by SDL/Trados. Most importantly, it’s taking its proven localization technique into other content areas — but it has coyly tried to stay below the radar in how it describes its offerings:

• Beyond software localization. In 2005 Alchemy added what it called “visual HTML localization” (we’d call it website translation) to the product’s repertoire. This new release adds “online help localization” (that would be translation support for online help, in our reading). What does Alchemy mean? Traditionally, authors write help as individual entries using tools such as Microsoft’s HTML Help, RoboHelp, or WebHelp. Translating the help files means processing thousands of individual files for each target language. Instead, V7.0 (aka Vortex) works on the compiled binary product rather than the piece parts, thus simplifying the process and generating fewer files compared to the Trados TagEditor. The Vortex translation memory also stores graphic objects such as screenshots, thus limiting manual processing of a big component of online help. Finally, Alchemy offers a migration utility for Trados translation memories.
• Advanced statistics-based processing. In 2005 Alchemy announced Layout Manager, claiming that it dramatically reduced the amount of time it takes to deal with dialog boxes. The product didn’t catch on, so the company has bundled it with Vortex. Alchemy CEO Tony O’Dowd told us that “it hasn’t gotten the traction we expected when we introduced it.” In this latest incarnaton the software engineer can see the layouts being generated and switch between them if they’re not just right.
• Consolidating translation memories. We constantly marvel at the Balkanized landscape of desktop, workgroup, and server TMs, all operating independently. Earlier this year Alchemy announced Language Exchange, a middleware solution that Alchemy hopes will give it a more strategic role in the global information management business. O’Dowd claims an open design so it can be integrated into existing systems, a SOAP interface for flexibility and connectivity, and the ability to store translation memories from Alchemy and SDL/TRADOS. This is a big step beyond the desktop for Alchemy.

As we approach the two-year anniversary of SDL’s acquisition of Trados, we still hear from language service providers worried about buying tools from a competitor — and buyers concerned about the consolidation of technology and services in a single supplier. Alchemy clearly hopes to step into this breach, offering 1) LSPs the safe haven of technology not controlled by a language services competitor and 2) corporate customers innovative technology and the ability to integrate TMs from different suppliers.

We believe that Alchemy’s installed base of 12,000 licenses will get its new offerings a hearing in many sophisticated localization shops looking for advanced translation automation solutions. However, the company has its marketing and sales work cut out for it. As a small supplier of technology, it lacks the broad sales coverage and marketing budget of SDL — and it will face the rising presence of firms like Idiom that will deem Language Exchange a competitive threat to their translation management solutions. We think there’s a place for Alchemy at this table — managing the translation supply chain and integrating it with websites, code, and other digital assets is a huge opportunity. But to get the consideration its technology deserves, Alchemy will have to become far less stealthy and much more aggressive in its marketing and business development activities.